Could my daughter move into the second property rent-free? Is this acceptable to Revenue or will there be issues?

O

Oxford

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My husband and I are in a middle of buying a second property, a nest egg. We have some savings into the bank and want to put them to good use.
Our daughter is in her final year of college, and lives with us at the moment. She would like to move out and rent/ save for a deposit in due time, but prices in Dublin are very expensive.

We were thinking to help, and let our daughter move into the property rent-free ideally. She will be paying the utility bills, and management charge for the apartment.

Is this acceptable to Revenue or will there be issues?

We wish the property occupied, bills paid and do our daughter a favour.
 
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The rent foregone might be considered as a gift from you to your daughter

Apart from the € 3,000 small gift tax free, or € 6,000 from both of you, the balance would count towards her lifetime tax free allowance of ♤ 400,000 for each year she was in the property
 
Thank you for your reply. Gosh... We just wanted to do our daughter a favour, really.
 
Thank you for your reply. Gosh... We just wanted to do our daughter a favour, really
Dr Strangelove said:
Not true.

See here. CAT exempt if child is under 25 or in full-time education.
Click to expand...
Thank you. She is 22, out of college in June. The property will still be in our names and I am not benefiting from her being there, just wanted to help her with a place to stay as it is so hard. Madness!
 
Once she turns 25 market rent less 2x€3k small gift exemption would count against her lifetime CAT threshold. Important to document the gift of free rent.

Opinions vary, but once it her PPR I believe she would be able to claim rent-a-room relief on up to €14k a year on rent paid to her from a flatmate.

See here.
 
Thank you so much. I appreciate it. Very strange rules. If she would be living at home with us would she be liable for same? I doubt it.
 
My reading is that she needs to be under 25 AND in full time education for the free rent to be exempt. Not just under 25. Is she planning on doing a post grad?
 
No decision yet. I was happy for a min as it would have given her 3 years to live there without any CAT implications. It does say 25 AND in full time education. Not sure what to do next at all.
 
So in theory you could charge her market rent, offset 6k a year as small gift exemption. Then she could fund the remainder by renting out a room. Any rent paid to you would be taxable. Rent paid to her below 14k assuming all conditions met would be tax free.
 
If she is considering a post grad, this might sway her or consider doing one before she turns 25.
 
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